<PAGE>   1


                                                                   EXHIBIT 10.3




                               THIRD AMENDMENT TO
                        TERM LOAN AND SECURITY AGREEMENT

         THIS THIRD AMENDMENT TO TERM LOAN AND SECURITY AGREEMENT (the
"Amendment") is made and entered into as of the 5th day of January, 1999, by and
between LANDAIR CORPORATION, a Tennessee corporation and LANDAIR TRANSPORT,
INC., a Tennessee corporation (hereinafter referred to collectively as the
"Borrower") and SUNTRUST BANK, NASHVILLE, N.A., a national banking association
(the "Lender").

                                R E C I T A L S:

         A. Borrower and Lender previously entered into that certain Term Loan
and Security Agreement dated July 13, 1994 (as amended from time to time, the
"Loan Agreement").

         B. Borrower and Lender amended the Loan Agreement pursuant to a First
Amendment to Term Loan and Security Agreement dated June 16, 1995 and a Second
Amendment to Term Loan and Security Agreement dated October 15, 1997.

         C. Pursuant to the terms of the Loan Agreement, Borrower has previously
executed in favor of Lender that certain Promissory Note which has a principal
amount outstanding as of the date hereof of $4,416,788 which is governed by the
Loan Agreement and is defined as the "Notes" in the Loan Agreement.

         D. Landair Services, Inc. was previously a "Borrower" under the Loan 
Agreement and the Notes and with the consent of Lender was released as an
obligor thereunder.

         E. Landair Corporation executes this Amendment to evidence its
agreement to be added as a "Borrower," as such term is defined and described in
the Loan Agreement.

         F. Terms not defined herein shall have the meanings ascribed to such
terms in the Loan Agreement.

         G. Borrower and Lender have agreed to amend the Loan Agreement as set
forth below.

         NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:

         1. Section 1.1 of the Loan Agreement is amended to acknowledge that
there will be no additional Advances under the Loan.



<PAGE>   2

         2.       Section 3.2 concerning "Negative Covenants" is amended by the
addition of the following as subsections (e) and (f) thereof:

                  (e) Acquisitions. Make any acquisition of another entity
         (either stock or assets) (or a series of related acquisitions) with an
         aggregate purchase price in excess of $25,000,000 without the prior
         written consent of Lender. For any such acquisitions with a purchase
         price of less than $25,000,000, Borrower will give prior written notice
         to Lender together with certification that such acquisition will not
         cause an Event of Default hereunder.

                  (f) Change in Control. Allow any person or entity that
         currently does not have Operating Control of Borrower to acquire such
         Operating Control without Lender's prior written consent. "Operating
         Control" means direct or indirect control of, or the ability or right
         to control or vote (directly or indirectly) a majority of the voting
         securities of Borrower.

         3.       Sections 4.1 and 4.2 of the Loan Agreement concerning 
"Financial Covenants" are deleted and the following sections are substituted in
lieu thereof:

                  Section 4.1. EBITR Divided by IR Ratio. While any of the
         Indebtedness is outstanding, Landair Corporation will maintain (on a
         consolidated basis) a ratio of earnings (before interest and rent
         expense and taxes) to interest and rent expense, of no less than 2.0 to
         1.0, calculated on an annualized rolling four fiscal quarter basis and
         measured at the end of each fiscal quarter commencing December 31,
         1998.

                  Section 4.2. Adjusted Funded Debt to EBITDAR Ratio. While any
         of the Indebtedness is outstanding, Landair Corporation will maintain
         (on a consolidated basis) a ratio of Adjusted Funded Debt to earnings
         before interest, taxes, depreciation, amortization and rents
         ("EBITDAR") of no greater than 3.0 to 1.0, calculated on an annualized
         rolling four fiscal quarter basis and measured at the end of each
         fiscal quarter commencing December 31, 1998.

                  Section 4.3. Capitalization Ratio. While any of the
         Indebtedness is outstanding, Landair Corporation will maintain at all
         times (on a consolidated basis) a ratio of Adjusted Funded Debt to
         Adjusted Capitalization not to exceed 0.55 at any time.

                  Section 4.4. Tangible Net Worth. While any of the Indebtedness
         is outstanding, Landair Corporation will maintain (on a consolidated
         basis) at all times a Tangible Net Worth equal to $39,000,000
         commencing September 30, 1998. Commencing December 31, 1998, Tangible
         Net Worth shall increase after each fiscal quarter by: (i) at least 75%
         of net income, without any deduction for losses; and (ii) 100% of the
         net proceeds of any equity offering.

                  Section 4.5. Definitions. As used in this Article IV, the
         following terms shall have the definitions set forth below:



                                      -2-
<PAGE>   3

                      FUNDED DEBT shall mean, without respect to the Landair
            Corporation on a consolidated basis, (a) any obligation for
            borrowed money; (b) any obligation evidenced by bonds, debentures,
            notes or other similar instruments; (c) any obligation to pay the
            deferred purchase price of property or for services (other than in
            the ordinary course of business); (d) any capitalized lease
            obligation; (e) any obligation or liability of others secured by a
            lien on property owned, whether or not such obligation or liability
            is assumed; (f) any liability of the Borrower to the Lender (or its
            affiliates) under any swap agreements or similar arrangements; and
            (g) any letter of credit issued for the account of Landair
            Corporation or its subsidiaries. The calculation of Funded Debt
            shall include all Funded Debt of Landair Corporation and its
            subsidiaries, plus all Funded Debt of other entities or persons
            which has been guaranteed by Landair Corporation or any subsidiary.
            Funded Debt shall also include the redemption amount with respect
            to any redeemable preferred stock of Landair Corporation or its
            subsidiaries required to be redeemed within the next twelve months.

                      ADJUSTED FUNDED DEBT shall mean, with respect to Landair
            Corporation all on a consolidated basis the sum of (a) Funded
            Debt plus (b) rent expense as calculated in accordance with Standard
            and Poor Corporation's methodology, as such method may change from
            time to time.

                      ADJUSTED CAPITALIZATION shall mean, with respect to
            Landair Corporation on a consolidated basis the sum of (a)
            stockholder's equity plus (b) Adjusted Funded Debt.

                      TANGIBLE NET WORTH shall mean, as of the date of
            determination, Landair Corporation's total consolidated net worth
            minus any goodwill or other intangibles as determined in
            accordance with generally accepted accounting principles.

         4. The Loan Agreement is hereby, and shall henceforth be deemed to be,
amended, modified and supplemented in accordance with the provisions hereof,
effective as of the execution of this Amendment, and the respective rights,
duties and obligations of Borrower and Lender under the Loan Agreement shall
hereafter be determined, exercised and enforced thereunder subject in all
respects to such amendments, modifications and supplements, and all terms and
conditions of this Amendment shall be for any and all purposes, a part of the
terms and conditions of the Loan Agreement.

         5. This Amendment shall be governed by and construed in accordance with
the laws of the State of Tennessee.




                                      -3-
<PAGE>   4

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.


                                   BORROWER:

                                   LANDAIR CORPORATION

                                   By: E.R. Brown

                                   Title: President


                                   LANDAIR TRANSPORT, INC.

                                   By: E.R. Brown

                                   Title: President

                                   LENDER:

                                   SUNTRUST BANK, NASHVILLE, N.A.


                                   By:  Allen K. Oakley

                                   Title:  Senior Vice President



                                      -4-